This is the Cato Daily Podcast for Thursday, October 25, 2007. I'm Caleb Brown.

What are the real impacts of freer trade on the average American family?

Dan Griswold, the Kito Institute's Director of Trade Policy Studies, argues that trade has made a huge positive impact on the average American family from income to material

wealth to household net worth. The analysis released today is entitled Trading Up, how expanding

trade has delivered better jobs and higher living standards for American

workers.

The jobs that are lost from globalization are absolutely real. 3.3 million jobs lost in the past decade in the

manufacturing sector. Certainly not all due to globalization but many of them were.

But you argue that trade is a net wash on total employment.

Why is that?

Well, trade does eliminate jobs, no question about that.

But as jobs are eliminated in one sector of the economy, if resources are free to move, labor,

capital, we create jobs.

In other areas, we create jobs through exports, we create jobs through domestic

investment, so I look back on a decade of figures and we've created

16.5 million jobs in the last decade and those 3.3 million

manufacturing jobs that have been lost which we hear day after day, week after week, they have been more than compensated by creating, by the creation of good jobs in the service sector. I looked very closely at that and found that those 3.3 million jobs have been replaced by 11.6 million jobs in sectors of the workforce that pay more than the typical manufacturing job. Think business and professional services, education

and health care, the wages and compensation in these fields are higher than they are in manufacturing.

Describe job churn and the role of trade in job churn.

You know, we're obsessed with the net job creation numbers we hear each month and they've been positive over the last

several years but they hide a very strong churn in the US labor market.

In a typical year, 15 million jobs will disappear, never to come back again.

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